[Proposed] ORDER TO REMAND ARBITRATION AWARD

Proposed order

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ARIZONA SUPERIOR COURT
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MARICOPA COUNTY
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BLUE LINE EQUIPMENT, LLC, an Arizona
limited liability company; SAPPHIRE
SCIENTIFIC, INC., an Arizona corporation;
and SKAGIT NORTHWEST HOLDINGS,
INC., a Washington corporation,
Applicants/Plaintiffs / (AAA Respondents),
v.
No. CV2010-026991
[Proposed] ORDER TO REMAND
ARBITRATION AWARD FOR
CLARIFICATION
SHAWN LORENZO YORK,
Respondent/Defendant / (AAA Claimant)
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Pleadings in this case are being filed by Mr. York in Propria Persona. Accordingly,
pleadings are to be considered without regard to technicalities. Pro se pleadings are not to
be held to the same high standards of perfection as practicing lawyers. See Hulsey v.
Ownes 63 F3d 354 (5th Cir 1995) and Hall v. Bellmon 935 F.2d 1106 (10th Cir. 1991).
In Puckett v. Cox, it was held that a pro se pleading requires less stringent reading
than one drafted by a lawyer (456 F2d 233 (1972 Sixth Circuit USCA). Justice Black in
Conley v. Gibson, 355 U.S. 41 at 48 (1957) has stated; "The Federal Rules rejects the
approach that pleading is a game of skill in which one misstep by counsel may be decisive
to the outcome and accept the principle that the purpose of pleading is to facilitate a
proper decision on the merits." Rule 8(f) FRCP and the State Court rule holds that “all
pleadings shall be construed to do substantial justice."
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This proposed order is an extension of Mr. York’s “OPPOSITION TO
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CONFIRMATION (A.R.S. §12-1512)” and “Motion To Correct (JOINED IN THE
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ALTERNATIVE TO VACATE)”. Defendant has motioned with good cause to stay
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Plaintiff’s application to confirm the arbitration award pending issuance of clarification
from the arbitrator and has reserved the right to submit “final” opposition and motion to
vacate upon receipt of the arbitrator’s clarifications without objection from the court.
The Clarification Exception to the Functus Officio doctrine is wholly applicable
here. The arbitrator is not being requested (nor is she empowered) to revisit or re-
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determine any of the merits of this controversy nor can such new conclusions be lawfully
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confirmed for judgment. However, significant case law1 establishes exception to the
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functus officio doctrine when an award is seemingly irrational (or unexplainable by the
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court) and requires clarification in order to determine whether the arbitrator has exceeded
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powers (or any other form of misconduct prejudicing the rights of a party). This is prudent
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policy to insure that arbitrators cannot shield themselves by “making noises of contract
interpretation” while denying pertinent clarification for an irrational or “unexplainable”
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award bargained for. Such results are certainly not contemplated by parties and are not
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conducive to the courts federal pro-arbitration policies. Legion case law establishes that if
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a court can arrive at a plausible explanation for an alleged “ambiguous” or
“unexplainable” award confirmation is appropriate. However, in absence of a court’s
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ability to adduce a rational explanation to an irrational award the court has no other
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appropriate or logical choice but to remand the award for clarification from the arbitrator.
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In this case, the court is unable to confirm the award because it is unable to arrive at a
rational explanation for substantial inconsistencies and contradictions within the award.
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Accordingly, in order for Mr. York (as a pro se litigant) to fairly and properly form
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his final motion to vacate (and in order for this court to determine the merits of any
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confirmation or vacation) the court respectfully requests that the arbitrator clarify the
following issues;
¤ why there exists no determination of Mr. York’s (Claims One and Six) that the Vortex
Brand name and assets were acquired by Skagit in 2009 in breach of the APA. (“Written
acceptance as a condition precedent to the consummation of the transaction” APA ¶2.10);
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¤ how the arbitrator determined denial of Mr. York damages (reasonable certainty) due to
design impracticability of an “artist’s rendering” (Claim Two) on one hand -- while
simultaneously refusing to rule on a governing provision (APA ¶2.4.1) that
establishes
that there exists no mandate for any design (or artist’s rendering) on the other2;
¤ how the arbitrator can deny damages due to patent obsolescence -- (Claim Three) and
simultaneously refuse to rule on a governing
provision (APA ¶2.4.1) that establishes that
there exists no mandate for any patent3;
¤ how the arbitrator can determine on one hand that Mr. York did not receive “access to
books and records on an annual basis [until 2009]”, (Claim Four) and on the other hand,
simultaneously deny the claim of breach. (“As a result of these proceedings [Mr. York]
was granted access to this data rendering this claim moot”.)
¤ how the arbitrator can determine on one hand that Skagit paid $39,000 dollars in
royalties two years late (Claim Five) and on the other hand, dismiss the claim of breach
“for lack of proof” and deny any award of interest damages.
¤ how the arbitrator can relieve respondents obligations to pay perpetual royalties (Claim
Eight) “as a consequence of the return of the technology” on one hand, (with reasoning
that, “because without the technology [Skagit] can no longer render performance of the
APA”) and on the other hand, refuse to rule on a governing provision (APA ¶2.4.1) that
establishes that there exists no mandate for
any patent and that performance is reached
solely in the use of the Vortex Brand Name4.
¤ how the arbitrator arrived at her determination to exclude EXHIBIT 158 in light of its
seemingly obvious pertinent nature.
¤ how the arbitrator arrived at her determination to exclude EXHIBIT 247 in light of its
seemingly obvious pertinent nature.
¤ how the arbitrator arrived at her determination to reverse her decision to rule upon APA
¶2.4.1 after the hearings were completed. (Mr. York asserts misconduct resulting in
prejudice from this action due to the fact that he abandoned his case in this regard to
concentrate on the remaining issues of the case.)
¤ why there exists no determination of Mr. York’s claim for past due royalties for product
“b”.
¤ (Possible) typographical errors that mandate clarification and correction; In Section II.,
“CLAIMS AND COUNTERCLAIMS ASSERTED.”, in referring to “Claim Nine”, the
arbitration award states the word, “Eight”. It is unclear whether this word intends to refer
to “Claim Nine” or “Claim Eight”, and in the “CONCLUSION” of the arbitration award;
United States Patent No. 6,675,437, written as 6,673,437 in the arbitration award.
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The 7th circuit properly remanded a case for clarification rather than guessing at meaning
of arbitrator’s award. Galt v. Libbey-Owens-Ford Glass Co., 397 F.2d 439, 442 (7th Cir.)
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An award “draws its essence from the agreement [only] if the award is derived from the
agreement, viewed in light of the agreement's language and context, as well as other
indications of the parties' intentions.” McGrann v. First Albany Corp., 424 F.3d 743, 749
(8th Cir.2005); see also Coast Trading Co., Inc., v. Pac. Molasses Co., 681 F.2d 1195,
1197 (9th Cir.1982) (holding that an “arbitrator is confined to the interpretation and
application of the parties' agreement” and that an “award is legitimate only so long as it
draws its essence from the agreement”) (quoting United Steelworkers of Am. v. Enter.
Wheel and Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960) Under
this standard of review, we do not “decide the rightness or wrongness of the arbitrators'
contract interpretation, only whether the panel's decision ‘draws its essence’ from the
contract.” Pacific Reinsurance Mgmt. Corp. v. Ohio Reinsurance Corp., 935 F.2d 1019,
1024 (9th Cir.1991) (quoting New Meiji Market v. United Food & Comm'l Workers Local
Union 905, 789 F.2d 1334, 1335 (9th Cir.1986)).
Courts often use the “irrational” or “arbitrary and capricious” standard. It has been said
that “a scintilla of evidence,” or a “barely colorable” or “rational justification,” or a
“proper basis” is all that is needed to deny a petition to vacate alleging that an irrational
award was rendered. It has also been said that a labor award will be held to be irrational
only “if ... no judge or group of judges could conceivably have made such a ruling” or if
the award was “actually and indisputably without foundation in reason or fact.” Similarly,
an award could be vacated if based on “reasoning so palpably faulty that no judge ever
could conceivably have made such ruling; or, mistakenly based on a crucial assumption
that is concededly not fact.
In one case a district court remanded for further explanation, noting that an
“incomprehensible” award would clearly be set aside if it were a jury verdict. In the Hardy
case, the appeals court declined to infer an alternate theory of liability where the panel had
already supplied one. Even though the award contained no legal reasoning, it stated a legal
conclusion, one that the court found contained “a fundamental mistake of law.” Since the
court was reluctant to invalidate the award, it exercised its authority to remand the case to
the arbitration panel to seek a clarification of the panel’s intent in making the award.
Hardy v. Walsh Manning Sec., L.L.C., 341 F.3d 126, 129-30, 134 2d Cir.2003
Courts have the authority to seek a clarification of whether an arbitration panel's intent in
making an award “evidence[s] a manifest disregard of the law.” Americas Ins. Co., 774
F.2d at 67. “Although judicial review of an arbitration award is very narrowly limited,
Diapulse Corporation of America v. Carba, Ltd., 626 F.2d 1108, 1110 (2d Cir.1980), a
court should not attempt to enforce an award that is ambiguous or indefinite, id. at 1111;
Bell Aerospace Co. v. Local 516, UAW, 500 F.2d 921, 923 (2d Cir.1974). An ambiguous
award should be remanded to the arbitrators so that the court will know exactly what it is
being asked to enforce. Cleveland Paper Handlers and Sheet Straighteners Union No. 11
v. E.W. Scripps Co., 681 F.2d 457, 460 (6th Cir.1982) (per curiam); Oil, Chemical &
Atomic Workers International Union, Local 4-367 v. Rohm and Haas, Texas, Inc., 677
F.2d 492, 495 (5th Cir.1982) (per curiam) (Appendix). We believe there is sufficient
ambiguity to require a remand in the instant case.
Manifest disregard of the law may be found, however, if the arbitrator "understood and
correctly stated the law but proceeded to ignore it", Bell Aerospace Company Division of
Textron, Inc. v. Local 516, 356 F.Supp. 354, 356
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Recognizing that if there is to be any meaningful judicial review, an arbitrator's award
cannot be absolutely immune from scrutiny, courts on occasion may remand awards to
arbitrators to clarify the meaning or effect of an award, see Olympia & York Florida
Equity Corp. v. Gould, 776 F.2d 42, 45-46 (2d Cir.1985); Americas Insurance Co. v.
Seagull Compania Naviera, S.A., 774 F.2d 64, 67 (2d Cir.1985); Diapulse, 626 F.2d at
1112 (2d Cir.1980); Cleveland Paper Handlers and Sheet Straighteners Union, No. 11 v.
E.W. Scripps Co., 681 F.2d 457, 460 (6th Cir.1982) (per curiam); Oil Chemical and
Atomic Workers International Union v. Rohm & Haas Texas, Inc., 677 F.2d 492, 495 (5th
Cir.1982) (per curiam), or to determine whether the arbitrator has in some way exceeded
his powers, Young Radiator Co. v. International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America, 734 F.2d 321, 326 n. 5 (7th Cir.1984);
Randall v. Lodge No. 1076, International Association of Machinists and Aerospace
Workers, 648 F.2d 462, 468 (7th Cir.1981).
The seventh circuit court of appeals has determined that, “Where the arbitrator has failed
to rule on the issue upon which resolution of the parties' dispute should depend, we deem
it appropriate to remand to the arbitrator. Although the general rule is that a reviewing
court should either enforce or vacate an arbitration award, courts have the power to
remand to the arbitrator where appropriate. Where, as here, the arbitrator fails to address
fully the questions presented to him, remand is appropriate.” Young Radiator Company v
United Automobile
“Although certainly not the normal course of things, we do have the authority to remand
to the panel for purposes broader than a clarification of the terms of a specific remedy.
That is, we have the authority to seek a clarification of whether an arbitration panel's
intent in making an award "evidence[s] a manifest disregard of the law." Hardy v. Walsh
341 F. 3d 126 (2003)
In RICH v. SPARTIS, the second circuit court of appeals determined, “Because the lack
of clarity in the arbitration panel's award does not permit us at this time to determine
whether the Award was issued in manifest disregard of the law, or exceeded the powers of
the arbitrators we will remand this case to the District Court with instructions to remand to
the arbitration panel for clarification of the Award.”
Courts have been willing to remand awards back to the arbitrator where the award itself is
either unclear or incomplete. In United Steelworkers of Am. Local 4839 v. New Idea
Farm Equip., Corp., the Sixth Circuit Court of Appeals held that a district court
erroneously concluded it could not remand an arbitrator’s award for clarification. The
court cited to United Steelworkers v. Timken Roller Bearing Co. in holding that a court is
not required to enforce an award which is not clear. Although the court may not decide on
issues that were not before the arbitrator, the court properly exercises its roll when it
remands an ambiguous award back to the original umpire.
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“It’s blatant guesswork to assume that the [artist’s rendering design] could be
manufactured at all. The Vortex SI [Product “b”] existed only on paper, and even as to
that it was only an artist’s rendering. Claimant’s proof of lost royalties has fallen short and
relief under claim Two must be denied”
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“The EPA has promulgated diesel engine emission regulations effective 2011 that will
make the [‘437 patent] technology [Product “a”] more expensive or impossible [obsolete].
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There is no proof that the current Vortex PTO [design] as it currently exists will have any
market into the future. These failures of proof compel the rejection of Claimant’s demand
for future lost royalties. For these reasons, Claim Three is denied”
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“Respondent’s discharge from their performance is sanctioned as a consequence of the
return of the technology. Without the [‘437 patent] technology, Respondents cannot
render performance under the APA regardless of commercial impracticability” (Page 12)
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_____________________________
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Honorable Judge George H. Foster
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Judge Of The Superior Court
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Respectfully submitted on January 18, 2011 by: /s/ Shawn Lorenzo York
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ORIGINAL has been electronically filed with the clerk of the court
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COPY of the foregoing electronically delivered this same date to:
Honorable Judge George Foster Maricopa County Superior Court
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COPY of the foregoing mailed this same day to:
Philip R. Higdon Michael T. Liburdi
PERKINS COIE 2901 N. Central Avenue, Suite 2000
Phoenix, Arizona 85012-2788
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